Serial numbers, such as the electronic product code, can be used to identify particular units of merchandise. These numbers can be used to track the location of a merchandise unit and to trace the origin and history of a particular unit as it travels from one stop to the next along a supply chain. The ability to do so is useful because it enables one to identify specific manufacturing lots that may correspond to tainted or defective goods. Other units with the same or similar history can be then be traced and recalled as needed.
At each stop in the supply chain, it may be desirable to establish the authenticity of a merchandise unit. In such cases, a serial number is of little value. A serial number, whether it is encoded in a bar code or printed directly on a package, can easily be copied. Inspection of a serial number provides limited basis for distinguishing counterfeit goods from authentic goods. At best, one may recognize that the serial number is syntactically incorrect, perhaps by recognizing that the number of characters is incorrect, or that letters are present where numbers should be and vice versa. However, a skilled counterfeiter is unlikely to make such errors.
In some cases, the serial number is not even visible. For example, the serial number may be encoded in an RFID tag. In these cases, one must rely on the availability of a reader to read the serial number. However, having read a serial number from an RFID, one encounters the same problem: it is difficult to tell from the serial number alone if the merchandise unit is authentic. A skilled counterfeiter can readily encode a syntactically correct serial number onto an RFID tag just as he can print a syntactically correct serial number on a package.